Strait of Hormuz standoff: Can a wider war be averted?

 The Gulf seems to be returning to another phase of active hostilities with the fragile calm established by the June 17 Memorandum of Understanding between the United States and Iran unravelling quickly. President Donald Trump has declared the truce finished, dismissing further talks as pointless, even though the original agreement had set aside 60 days for negotiation. The collapse came as Iran buried its late Supreme Leader, Ayatollah Ali Khamenei, killed in February when the war first broke out, in a six-day funeral procession that drew vast crowds. The latest escalation started after Iran targeted ships transiting the Strait of Hormuz through a route hugging the Omani coast, instead of the route it prefers, which is through the Iranian territorial waters.

Fighting has since intensified sharply. The United States has attacked over 170 Iranian military targets in 48 hours. American forces struck air defences, logistics hubs and railway lines leading to Mashhad, where the Supreme Leader was laid to rest. At least 14 people were killed and 78 injured across five provinces. Sites near the Bushehr nuclear plant and the port of Chabahar were also targeted, and Trump has floated widening the campaign to civilian infrastructure, including desalination plants, power grids and Kharg Island, through which roughly 90 per cent of Iran's oil exports flow. Iran responded with missile and drone attacks on American assets and Gulf states, setting off air raid sirens in Kuwait, Bahrain, home to the US Navy's Fifth Fleet, and Qatar.

Clearly, at the heart of the dispute lies the Strait of Hormuz. Under the interim deal, Iran had agreed to make its best effort to keep the strait open and free of charges for commercial shipping. That understanding broke down almost immediately over the question of which route vessels should take. Washington backs the so-called Omani route, close to Oman's coastline, under international coordination, while Tehran insists ships pass along the Iranian side under its own supervision. The strait is simply too wide for Iran to police both routes peacefully, so it has turned to live fire, cheap drones and fast attack boats to push shipping away from the American-favoured corridor.

This is what makes the standoff so hard to resolve. The two sides are not just fighting over territory or ideology but over fundamentally incompatible visions of who controls the strait, and neither has an obvious way to back down. Washington has overwhelming firepower but little appetite for a drawn-out ground war or the kind of forced regime change that might settle things decisively. Tehran, meanwhile, has absorbed heavy losses yet shows no sign of political exhaustion. Its leaders regard giving up control of Hormuz as an existential threat to the regime's survival, which means escalation, however costly, tends to look safer than concession. Iran also holds other cards, including the ability to disrupt shipping in the Red Sea and the Bab el-Mandeb Strait or to threaten undersea cables, giving it leverage well beyond its own coastline.

Domestic politics inside Iran make compromise even less likely. The deaths of senior figures early in the war left the Islamic Revolutionary Guard Corps firmly in charge, and the regime has grown more hardline as a result. Pragmatists who might welcome sanctions relief through a lasting deal are increasingly sidelined, while any negotiator seen as too accommodating risks being branded a traitor by the IRGC. That dynamic leaves little room for the kind of quiet diplomacy that once might have de-escalated tensions.

The human and economic cost is already visible. Shipping through Hormuz has collapsed from around 130 vessels a day before the war to barely a handful using the southern route. Washington's strategy of applying military pressure to force the strait back open does not appear to be working, and Iran has given no indication it intends to yield. Unless the US can offer Tehran a credible way out that addresses its core security concerns rather than simply demanding surrender, analysts warn that Washington may find itself trapped in a long, open-ended regional war it never fully intended to fight.